I'm a builder and I've
heard that I have to do a number a steps before I commence proceedings in
the County or High Court. What are they?

The Pre-Action Protocol for
the Construction and Engineering Disputes ('the Protocol') came into force on
2 October 2000. It should be noted that the Protocol does not apply to
applications to enforce the decision of a construction adjudicator,
applications under Part 24 of the Civil Procedure Rules 1998 ('CPR') (summary judgements) and claims for
interim injunctive relief. Additionally, it does not apply to disputes where the issues are
substantially the same as those in a recent adjudication as exchange of
information has already taken place.

The Protocol encourages the
parties to:

exchange information
early on;

negotiate a pre-action settlement;
and

enables the action to be
run efficiently if proceedings are commenced.

The Protocol also sets out
a specified procedure which must be followed. If it is not, then a
party found to be in breach of the Protocol is liable to be penalised by
the Court when the question of costs falls to be decided.

The first step for a
proposed Claimant is to forward a formal 'Letter of Claim' with full
details of the Claimant's claim. Within fourteen days of this
letter, the proposed Defendant must acknowledge the letter. If no
acknowledgement is received within fourteen days then the proposed
Claimant may immediately commence proceedings.

If the proposed Defendant
wishes to contest
the Court's jurisdiction, refer the matter to arbitration or the claim
that the letter is addressed to the wrong Defendant, then the proposed
Defendant must inform the proposed Claimant of this within twenty eight days.

The proposed Defendant has
twenty eight days following receipt of the letter (or later if agreed with
the proposed Claimant up to a maximum of four months) to provide a full response
to the Letter of Claim If the proposed Defendant raises any
counter-claim, then the proposed Claimant will have a similar period to
respond to any counter-claim.

It should be noted that the
Protocol encourages the parties to meet after receipt of the Defendant's
response to the Letter of Claim. The aim of the meeting is for the
parties to
agree the issues and identify the cause of the dispute on each. The
parties must then consider how the issues might be resolved without
litigation or, if litigation cannot be avoided, the steps necessary to
ensure that the litigation is conducted in accordance with the overriding
objective of the CPR. In that context, they should consider the
appointment of joint experts, disclosure of documents and how litigation
costs might be kept to a minimum. The possibility of a joint expert is,
therefore, not given the prominence it has in other protocols, perhaps a
recognition of the complexity of the type of claim falling within the
protocol.

The conduct of
the meeting between the parties is not prescribed by the Protocol but the
Court expects the attendees to
include representatives with a mandate to settle or recommend settlement.
The expectation of the Court is that insurers and lawyers will also
attend. If the parties do not agree they should specifically consider an
alternative dispute resolution procedure.

Finally the Court may be told
by any party who attended the meeting that it took place, with whom and
when. If a party didn't attend, why not and if the meeting didn't happen,
why it didn't happen. They may also report on any agreements reached.
Other than that, anything said at the meeting is entirely 'without
prejudice' and therefore inadmissible in Court. This allows both
parties to speak openly about the issues in order to resolve them quickly.

The Protocol enshrines what ought to have been occurring at the pre-litigation
stage in any event. If the
'real' issues are identified promptly, early and cost effective settlement
becomes a realistic prospect. Anyone who does not comply with the
Protocol runs a risk of being criticised by the Court at a later date.

Article
First Published: 4 April 2005

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